People forget how many hundreds of business plans that lenders and investor like Banks and Venture Capitalists see each year. It’s a lot and if yours doesn’t stand out you run the risk of rejection before you even start.
There are lots of books and loads of consultants that can help you write a good business plan but here are some of my favourite things to get right.
Plan the business first
Somehow it shows when I get a plan that has just been written to try and convince me to invest. A plan should be a way of recording your strategy and implementation. It’s the outcome of a well thought out strategy and planned business, isn’t it? Plan your business then write a plan.
Don’t try to impress
Long plans, complicated sentences and overuse of sophisticated English don’t impress. They just make it harder to read and understand. Try it out on your Mother or 12 year old kid and if they can understand what your business does and how it works then so will I… !
Finance is not the after thought
Finance, cash and how it moves in your business; from the investors pocket to you then on to suppliers, staff, resources and hopefully back from customers is a key part of your business. So don’t just leave the “Finance” to a small section at the back of the plan, it should feature throughout.
Business not product
Please don’t forget we invest in the business not the product. A 30 page business plan that talks for 20 pages about the product is missing the point. Investors, especially equity investors (VC, Angels and Crowdfunding) need to be convinced the business is or can be run properly. After all the most common cause of failure is poor management (that’s also a hint by the way).
Ask for the money
Don’t laugh some people forget to say how much investment they want. Even more fewer tell me what they are going to do with it once they get the stuff. Include a spend budget or investment plan. You should also have a go at guessing ( or even work out) what the business is worth now and what it might sell for, assuming you are chasing an equity investor. We are very un-likely to agree with you but it will help you standout.
I could go on all day but these are a few of the mistakes or things to not get caught by, its competitive and I would love to invest in you but please help me out a bit by being good at communicating what your business proposition is all about.